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The European banking system was characterized by fragmentation
up until the end of the nineties. In the mid nineties, the
number of credit institutions in the European banking system
fell by more than 500. The European Banking sector witnessed
the launch of the European Economic and Monetary Union (EMU)
and the subsequent creation of the world’s second
biggest capital market. The new financial regime resulted
in great synergy potential and, consequently, an increase
in cross border bank mergers.
Prior to the EMU formation, the vast majority of bank mergers
occurred within national borders. While the merger of domestic
competitors is seen as having enormous cost-saving potential,
cross-border mergers are frequently made for different business
reasons. As Europe became more homogeneous, banking and
financial institutions faced fewer advantages on the domestic
market over foreign competitors. Banks began to act quickly
to increase their presence across the entire European market.
The European economic climate is changing due to globalization,
deregulation, disintermediation, geographic diversification,
and significant advances in information technology, all
of which play a considerable role in mergers. Nonetheless,
cross-border mergers in Europe continue to be challenged
by the different legal and fiscal regulations, and also
by linguistic and cultural differences.
For further information on the European Banking System,
click on the following Central Bank Links:
United Kingdom:
Bank of England: http://www.bankofengland.co.uk
Germany
Deutsche Bundesbank: http://www.bundesbank.de
Sweden
Sverigues Riksbank: http://www.riksbank.se/
Switzerland
Schweizerische Nationalbank: http://www.snb.ch/
France
Banque de France: http://www.banque-france.fr/
Russia
Central Bank of Russia: http://www.cbr.ru/eng/
Poland
National Bank of Poland: http://www.nbp.pl/
The Netherlands
De Nederlandsche Bank: http://www.dnb.nl/
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